Chugach Electric Association has signed on to buy Fire Island wind power starting Jan. 1, 2013. CIRI expects this power purchase agreement to enable construction of the first phase of the Fire Island wind project later this year with power production starting in late 2012.
Fire Island Wind LLC, a CIRI Energy LLC subsidiary, will develop and own the wind farm. The first phase of the project will erect 11 turbines capable of generating up to 17.6 megawatts (MW). The first phase is expected to supply 48,500 MW-hours of power to Chugach annually, enough electricity for approximately 6,000 Southcentral Alaska homes, or about 4 percent of Chugach’s load.
Chugach agreed to pay a flat net price of $97/MWhour for 25 years. This price is higher than Chugach’s average cost of power today, but it is expected to become increasingly competitive through the life of the contract as Southcentral Alaska natural gas and other energy prices trend upward.
The Regulatory Commission of Alaska (RCA) must approve the power purchase agreement before Fire Island Wind finances the project and resumes construction. Chugach will ask the RCA for accelerated consideration with a final decision before Sept. 15, 2011. CIRI anticipates RCA approval in time to resume construction in 2011 to qualify the project to receive an America Recovery and Reinvestment Tax Act of 2009 Section 1603 grant. The project must be completed, commissioned and producing power before the end of 2012 to receive this federal stimulus grant.
The 11-turbine project phase is expected to cost about $65 million for on-island infrastructure, plus another $25 million for transmission to connect the wind project to Chugach’s electric system. CIRI expects that the project will qualify for $18.7 million of federal stimulus funds.
“Chugach Electric Association deserves credit for acting as an Alaska energy leader by diversifying its energy sources and helping stabilize the price of power,” said Ethan Schutt, CIRI senior vice president land and energy development.
CIRI officials also applaud Anchorage Assembly efforts to encourage Anchorage’s Municipal Light & Power (ML&P) to negotiate a deal to purchase Fire Island wind power.
“Responsible community leaders understand that we can protect our community power supply by reducing utilities’ overdependence on a single resource, natural gas from the Cook Inlet basin,” Schutt said. “Unfortunately, it’s too late for ML&P to negotiate a power purchase agreement that will give its customers the benefit of the federal stimulus grant.”
The public is invited to submit comments regarding the Fire Island power purchase agreement to the Regulatory Commission of Alaska. Visit rca.alaska.gov to learn more.